Question: Consider the following stocks with beta and expected return: StockBetaExpected Return A0.58.0% B1.211.0% C1.515.0% The T-bill rate is 3%, and the expected return on the

Consider the following stocks with beta and expected return:


StockBetaExpected Return

A0.58.0%

B1.211.0%

C1.515.0%


The T-bill rate is 3%, and the expected return on the market portfolio is 12%.


Which stock(s) would be a good buy? Explain why?

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